Everything About Credit Cards

If you own a small business, you probably carry a business credit card.

If you use it as a tool, it can be a huge asset. It can help you see exactly where your money is going, and it can carry you through those times between you needing to pay a bill and your customers’ payments coming in. It can even save you money by providing rewards for items that are essential to running your business.

Some rewards credit cards will give you cash back for gasoline, restaurant meals or air travel, while some will provide rewards for buying office supplies necessary to your business. Just make sure you use it for items that really are necessary – don’t spend to get the rewards.

Also, as tempting as it may be, never use your business card for personal expenses. If you do, the IRS will declare the interest you pay on that credit card as non-deductible. So unless you buy your uniforms from Macys – don’t use it there!

The only safe way to use a business credit card is to pay it in full each month. Unless your business has suffered a true emergency – such as the transmission going out on your delivery van, or the furnace in your store blowing up – you should never use it for purchases that aren’t in the budget for the current month.

Getting into debt is a huge mistake that small businesses make – and it’s so easy with a credit card in your pocket. You can convince yourself that you really “need” a better looking desk and a nicer chair – or that your computer simply has to be upgraded this year – or that those motivational posters are important.

But the truth is, the only things you really “need” to spend on are:

Things that make it possible to do business, such as the raw materials for your products, your employees, your rent, your power, and your phone.

Things that improve your service and bring you more customers / profits.

Marketing your business. But beware in this area. With easy credit, it’s easy to fall for advertising schemes that don’t return a dime on your investment.

In today’s credit climate, running up huge balances is downright dangerous – especially on a business credit card. Why especially? Because business Credit Cards don’t fall under the provisions of the CARD Act of 2009.

That means your credit card issuer can change the interest rate on your existing balances. If you make a mis-step, such as running your balance too high, your beautiful 5.9% interest rate could suddenly become 25.9% Worse, you don’t even have to make a mis-step. They can do it for no other reason than they want to earn more profit.

What would that do to your business? Would that additional interest put a serious drain on your monthly profits? Be careful.

Some credit cards are basic in their offerings, looking as mundane as the card sitting next to them, but not the ZYNC from American Express. This credit card allows you to place your personality into the card. You get to choose which lifestyle pack will suit your life with this secured credit card.

Are you always on the go? If so you might discover the Go Pack for the ZYNC American Express is going to fit you the best. You get to earn 2x the rewards points on airfare of the other cards. You also have an annual membership to the credit card registry at a $29 value. The feature provides a way to cancel and replace any lost or stolen cards with one call. There is also an emergency passport replacement assistance tied to the account. Avis and Budget have thrown in a deal with savings of up to 25 percent. Hertz provides 20 percent savings plus GPS for 2 days free with a rental. For those on the go a $50 credit is offered for vacation packages, though this is a limited time offer.

The Social Pack is a whole different animal with 2x membership rewards on restaurants and any events purchases you make. You also obtain access to event tickets before they hit the public sphere.

Is staying connected a must for you? Why not save a little with the ZYNC American Express Connect Pack? This package offers rewards points on mobile and cable services such as internet, cell phone use and more. You can also use less points if you shop at the member reward site exclusive to American Express holders.

Environmental savings are definitely worth every penny to make less of a footprint on the earth. Why not make your credit card work for the earth with the Eco Pack. You get rewards points when you buy green merchandise from certain green merchants. You also use fewer points on the American Express rewards site. With green living tips and gifts this pack is certainly for anyone who loves the environment. The Eco Pack has one more interesting feature in that it will purchase $1 of carbon offsets from TerraPass, which helps to reduce the carbon emissions of dairy farms and landfills in the US.

Eco Pack is the only card without an annual fee. All others are $20 for each year. The basic card is $25, so there is even more savings with the ZYNC. You will not pay interest when you pay in full each month, and you have purchase protection. A card that offers your personality to bank rewards for you is what American Express has created.

The hitch in obtaining this card is American Express’ strict guidelines. American Express is a card for people who are responsible with credit and their credit history. The company offers their ZYNC, basic, business credit cards, and even student credit cards to those who have the high credit scores.

Credit card issuers weren’t happy when the CARD Act of 2009 was signed into law. Between May of 2009 and the August 2009 and February 2010 dates when the new regulations went into effect, they worked hard to ensure new profit sources.

But in spite of that, Americans are carrying less debt than they were a year ago. Average credit card debt in the first quarter of 2010 was down 10.6% from during the first quarter of 2010.

Fewer consumers are falling 90 days or more behind on credit card payments as well. That figure is down nearly 16% – from 1.32% in 2009 to only 1.11% in 2010.

With fewer penalties, and no surprise interest rate increases, consumers have been able to make a larger dent in their credit card balances in spite of higher interest rates overall.

Under the terms of the CARD Act, credit card issuers may not increase the rate on a consumer’s current balance unless he or she is 60 days late – or unless the card carries a variable rate.

Many cards now do carry a variable rate, but the fluctuations in interest are minute – changing only with the Prime Rate, which has held relatively steady. Compare this to the previous rate increases of as much as 10 to 12% in one month before the CARD Act went into effect.

Another plus that resulted from the CARD Act is that issuers can no longer slash a consumer’s credit line to a level that will trigger an over-limit penalty. Before the act, there were reports of credit limits being lowered to as much as $6,000 below the customer’s current balance owed.

For consumers who could not find a way to pay the balance that exceeded their new credit limit, over-limit fees continued to mount. These, of course, caused their credit scores to plummet, making it doubly hard to borrow money elsewhere to pay down the balance.

The CARD Act is also making it easier for consumers to pay down their debt. Where a consumer’s entire payment used to be credited toward their lowest interest balances, now any amount over the monthly minimum is credited toward their highest interest balances.

In the past, a consumer might have had a high interest purchase balance adding to his debt month after month, and was unable to pay it down until any low interest balance was paid in full.

Another good sign for our economic future is that Americans seem to be less eager to take on new debt. According to TransUnion, the number of new cards opened during the first quarter of 2010 was down 24% from the same period last year.